Testimony of Eugene Kinlow
Member
District of Columbia Financial Responsibility and ManagementAssistance
Authority

Friday, April 27, 2001

Madame Chair and Members,

The District of Columbia Financial
Responsibility and Management Assistance Authority ("the
Authority") is very supportive of this effort by the District of
Columbia Council to share factual information about the future of the
District's publicly funded health care safety net services. I am Eugene
Kinlow, a member of the Authority, and I am pleased to represent the
Authority on behalf of Dr. Alice Rivlin. She regrets that she is unable
to attend. So do I.

Information Sharing is Critical

The Authority has never
participated in a Council hearing or roundtable. But it is very rare
that the District Government has been prepared to consider the type of
decision you are contemplating today. It is important that the Authority
participate in your effort to ensure that as much information as
possible is available to each member of this Council and to the
residents of this community.

(Because of this unique
circumstance, the Authorities' presentation should not be considered as
part of the panel representing the office of the Executive.) Everyone
should have the opportunity to consider the relevantfacts
about this plan, the "DC Health Care Alliance", to reform the
health care safety net.

The Crisis

Unfortunately, and paraphrasing
Dr. Rivlin, too many responsible officials have not been willing to face
a very difficult reality: utilization at DC General has been shrinking,
it is overstaffed, and financial and administrative management of the
hospital and clinic operations have been very poor. And there is not an
integrated comprehensive health care system.

But the fault or blame should not
be imputed to the PBC which has responded to political reality. It
really begins at the point of system design. Building or rebuilding the
system must begin at the beginning. With choice. With patients choosing
their providers. With provider physicians doing what they do:

fussing over and fussing with
patients about their health and their healthy and unhealthy
behaviors.
Referring them to specialty treatment when needed and to hospitals
when appropriate.
Scheduling them for follow ups.
giving them a medical home with an attendant medical history

I recently received a letter from a local
pediatrician who proposed that we build a small, comprehensive full
service hospital at the DCGH site as the preferred solution. Sounds ok,
except that that it's an oxymoron- -a hospital cannot be both small and
comprehensive. And a small hospital is prohibitively expensive.

During the first quarter of this
fiscal year, The CFO informed us that the DCG would run out of money
during the second quarter and face a shutdown. I am reminded of the
famous malapropism: when you get to the fork in the road, take it.
Therefore, last December, at the fork, the Authority insisted that the
city act.

The Process

As you know, the Mayor, the
Authority, the PBC Board and this Council began this process last summer
in a collaborative effort. The Authority's role through most of the
process has been as an advisor and as a facilitator. It has taken on a
larger role since January because the Council and the Mayor required the
use of the Authority's resources and its procurement authority to
address a critical problem when time was running out.

Optimally, this process would not
involve the Authority. Optimally, the District would have taken a year
instead of a few months to develop and implement a plan. But the crisis
at DC General Hospital has been a long time in the making. It was only
in December that the Mayor and the Council reached a consensus and
determined that the District would seek a partner to manage a private
delivery system. As a consequence, there have been too few opportunities
to ensure maximum public involvement.

The RFP

The proposed contract is a
critically important step in the evolution of the District's health care
safety net that began with the establishment of the PBC several years
ago. The goals this Council participated in setting for the PBC were
mirrored in the January RFP. The RFP anticipated a program that will:

provide high quality health care services
through an integrated health care delivery system with the capacity to
serve 30 percent more health care while costing considerably less than any
proposed alternative.

demonstrate excellence in customer service to
individuals with diverse cultural backgrounds

The challenge to the Authority, the Office of the
Mayor, and the Council, all of whom participated in the selection
process, was to identify and test the capacity of a willing partner to
undertake the commitment to work with the District to achieve these
goals.

We unanimously agreed that the proposal submitted by Greater
Southeast Community Hospital best met this standard.

Proposed Contract (services & firewalls)

This
proposed contract with the DC Health Alliance, negotiated by the
Authority on behalf of the Mayor and the Council, is consistent with and
supports the goals we all agree upon. For example, the proposed
contract:

funds an emergency room and clinics that will be
maintained on the DC General campus.

guarantees access to quality hospital services at
Greater Southeast Community Hospital which like DC General Hospital, is
also in the southeast quadrant of this city (4,800 inpatient admissions)

This proposed contract does not relieve the
District of the burden of administering the safety net health care
services traditionally provided by the Public Benefit Corporation. The
proposed contract with the DC Health Care Alliance does, however,
provide the financial, patients and other data necessary for the
District to monitor the delivery system and outcomes while ensuring that
providers are accountable.

The proposed contract also protects District
taxpayer. The contractor and the subcontractors receive payment only for
services rendered. The District's resources are not transferred to the
contractor under this proposed agreement. A third party dispersing went that
will hold and release funds to pay administrative and patient service
claims only upon notice that a service has been provided. This approach
will protect the balance of the District's resources so that no
creditor, court or even a public a agency can claim them. Finally, the District has the authority under
the proposed contract to assign any part of this agreement to another
party should the contractor or a subcontractor fail to perform.

We all share some angst about Doctors Community
Hosp. Corp. I know that it is counter intuitive, but our experience is
that bankruptcies often lead to improved services and new viability.

Conclusion

The city spends over 20 cents of every dollar it
receives on Health yet we have horrendous health care statistics. We
must spend these dollars more wisely before we spend more. In a city
with an empty hospital bed for every two occupied beds and with much
primary health care occurring in expensive emergency rooms, the debate
about DCG is a distraction and must end. The shifting of our inpatient mentality to an
outpatient/primary health mentality must begin.

Your burden is not unlike that of any legislative
body that faces a similar challenge in a community anywhere in this
nation. Your consideration of this major reform plan is a difficult task
for this community and therefore it is difficult for each of you. I now
that it is your intention to undertake your deliberations with care,
diligence and a respect for the facts and for those with whom you may
disagree.